811.512394 Shipping/54
The Ambassador in Japan (Grew) to the Chief of the Division of Far Eastern Affairs (Hornbeck)
[Received January 21, 1936.]
Dear Mr. Hornbeck: You will recollect that in my talk with the President on September 23rd I took up with him the question of the war profits tax assessed by the Treasury Department against certain Japanese steamship companies and I said to the President that at least as a matter of equity, if not of law, this was an issue in which, [Page 951] in my opinion, the Japanese were in the right and we in the wrong. The President showed definite interest in the matter and said that he would take it up with Mr. Coolidge,1 Under Secretary of the Treasury, with whom he expected to confer on the following day, and that if no satisfaction were obtained in that quarter he would have a bill introduced in Congress with a view to bringing about an equitable solution of the case.
At the time of my visit to Washington it appeared that the Treasury Department looked at the matter purely from the strictly legal point of view which, from the standpoint of that Department, was perhaps a logical position to take as it may not have lain within the province of the Treasury to consider the element of equity. It therefore seems possible that only Congressional action may provide the solution.
I am writing to express the hope that you will think it desirable to follow this matter up and possibly to suggest, either to the Secretary or to Mr. Phillips,2 that unless action is taken at the commencement of the Congressional session the President be reminded of his promise to me in this connection. The Japanese have not mentioned the matter on my return but it is one of those cases which if equitably settled would, I think, create a favorable basis for appealing to the Japanese Government for equitable treatment in other cases involving our own interests.
If it is felt that it would be helpful and appropriate for me to write to the President myself on this subject at any time please let me know and I shall be glad to do so. You will remember that, in accordance with the President’s request, I sent him on September 23rd a one-page memorandum3 setting forth the principal facts in the case.
Sincerely yours,